A change of perspective at Analog Devices’ Catalyst centre
Analog Devices employs 1,500 people in Ireland and has been operating here since 1976. Last month the company announced an investment of €630 million in its next generation semiconductor research & development and manufacturing facility in Raheen, Limerick. The investment will lead to the creation of 600 jobs. It’s timing also marks a change in how the company sees its role as a solutions creator working with what it traditionally regarded as ‘customers of customers’, creating a tier of technical expertise one step removed from the lived experience and problems companies are trying to solve, as vice president of automation Leo McHugh explains.
“The way we used to sell was ‘here’s a bag of components, knock yourself out’. Customers have huge expertise in what they’re doing but they also want more,” he says. “For example, in our work with Johnson & Johnson we would have never talked to them directly when we were selling components. A solution would go through a line builder, a systems integrator to one of our customers building the instruments. They were being presented with ‘here’s what we have, what can that solve for you’? as opposed to getting access to us and talking about what the real-world problem was. We have the technology so for us it’s about how do you craft it, hence this next stage of co-creating a solution. It’s been great.”
Analog’s €100 million Catalyst centre is designed to foster collaboration between IT and telecommunications sectors, particularly in the area of 6G networks central to the next generation of smart manufacturing. McHugh explains how the move from the current Industry 4.0 model to Industry 5.0 is a natural, and necessary, evolution.
“At a recent forum I was at it was said that probably 20% of the data generated in a factory is accessible and used. We need access to all that data and that’s what 4.0 is about,” says McHugh. “Industry 5.0 is about adding more of the insights from the data. What are the algorithms you need? How do you align the peoples’ expertise, because that’s what kept the factory running in the absence of the data. Without it you only had the guy walking past the big turbine who thinks ‘that doesn’t sound right, it could use a bit of maintenance.’ It’s about the impactfulness of the data and marrying that up with the [human] expertise.”
Automation
Automation remains central to Industry 5.0 but McHugh believes this new level of gaining insights through automation is not necessarily going to decimate the jobs market.
“It’s interesting with automation that people think ‘oh my role is in jeopardy’. I think it was the French builders’ union who put up a big banner outside an unfinished building and it said: “ChatGPT finish this building”. It’s not going to replace everybody,” he says.
“One of our customers was telling us how they installed some cobots and retrained some of the people in the factory to maintain and train the robots. The workforce is changing.”
He argues that getting the message out that cobots are a tool rather than a replacement for a human workforce is getting out.
“Everybody sees the number of jobs that are being advertised, there’s just not enough people to enable some of the growth plans that are there,” he says. “I think when you see someone augmented with a cobot where you can say ‘here’s the mundane role, now if that person is freed up from doing the mundane role how do they actually add to the process and be more productive’? That message is getting easier as there is a recognition that there is a shortage in the workforce.
Supply issues
The Covid-19 pandemic and ongoing political instability created a problem for semiconductor supply chains. McHugh admits Analog struggled to meet demand but that an understanding customer base held firm.
“During the 2020 downturn we actually kept going. We kept building because we do a lot of medical and healthcare, so they were designated as critical. We probably didn’t satisfy any single customer but we managed to keep them,” he says.
“A lot of our customers we have long relationships with, especially the bigger ones. You have to build up a bit of a trust, like ‘yes I know you’re asking us for a million pieces but how many do you need this week or this month’? They’d say ‘ok we don’t need a million then, give us 80,000 this week.’
“In the early days, medical did get priority but we never took parts we promised any of our customers and gave them to anybody else. We couldn’t keep all of our customers happy but we tried to keep them serviced. Customers have come back to us and said they really appreciated our honesty. We showed up, we listened, we tried to understand.”
While McHugh maintains a willingness to comply with existing regimes on the manufacturing, import and export of components, he is concerned about regulatory efforts such as the CHIPS Act in the US and its EU equivalent.
“Whether it’s the UK or EU saying ‘hey we have the right to step in and decide who’s getting what’ that doesn’t work for Analog Devices. We’re a global company. We have supply chains. We manufacture all around the world. We will decide on the allocation to various customers,” he says.
“The US has various rules and regulations about export and whatever and we are going to follow the laws, so we are compliant to any export regulations. If territories start to say ‘well it’s manufactured here so this is going to get first priority. I don’t think that helps anybody. If anything, over the last 30 years we’ve seen that the more open supply chains and trade are the better it is for everybody.”
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